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Indonesia Facing Germany’s Afd Strategic Challenge Ahead – Oped

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Key Takeaways

  • Shift from Values-Based to Transactional Relations — If the far-right AfD comes to power in Germany, Indonesia should move from a values-driven, multilateral partnership to a more pragmatic, transactional approach focused on trade, investment, and concrete outcomes.
  • Impact on Trade, Investment & Climate — German companies in Indonesia may remain in the short term, but long-term uncertainty could arise from reduced German influence in the EU, weaker support for sustainability standards, and a potential slowdown in green financing and energy transition projects.
  • Strategic Adaptation Needed — Indonesia should maintain diplomatic engagement, seek alternative climate funding from multilateral banks and private investors, and position itself as a stable, predictable partner while preparing for reduced German/EU support on climate, security, and Indo-Pacific strategy.

This essay analyses how Indonesia could deal with the Alternative for Germany (AfD) potentially rising to power. It is strategic in nature and attempts to transform the existing values-based, multilateral bilateral relationship with Germany into a more transactional relationship and assess the implications that Indonesia could face in view of Germany’s waning influence in the EU and how that would, in turn, affect CEPA implementation between the two countries.

In opposition, the AfD have claimed to be supporters of multilateralism and has accused other EU parties of undermining fundamental European cooperative values. But if Germany’s influence in the EU declines, it will be very difficult for the AfD to put this into practice. Under the current administration, Germany has been Indonesia’s most influential European partner, and it continues to advocate ASEAN centrality, democratic governance and multilateral cooperation. These values are far removed from those advocated by the AfD, and therefore there will be fewer high-level visits, less strategic dialogue and a narrower diplomatic agenda that will undermine Indonesia’s efforts to win trust and cooperation.

There are elements of continuity, but with some degree of caution, with respect to the relationship between trade and investment on the one hand, and the potential rise to power of the AfD on the other. It is very likely that German companies currently operating in Indonesia will remain for the time being. As has been the case in the past, German political discourse has historically encouraged more investment in Indonesia. It remains to be seen, however, to what extent an AfD-led Germany would continue to encourage more investments and advocate for the increased presence of German companies in Indonesia. For now, the image of German companies currently operating in Indonesia is that they would be less likely to receive encouragement by an AfD-led Germany than their EU standards- and sustainability-advocating counterparts would in an EU consensus environment.

Also, while it is very likely that, for the time being, German firms will remain for the time being for short-term economic gains, they may be negatively affected in the long term by possible changes in the rules, sustainability requirements, etc., that may be introduced by the new German government for trade and investments with other countries, including in the EU. This could also be felt by Indonesian companies that export to other EU countries besides Germany. As it is now, they could be subject to different rules and regulations when exported to other EU countries than Germany, without the customary German support within EU institutions that they receive and would expect to receive when such support is needed. As mentioned, this is particularly relevant with regard to green financing and climate change-related projects, which could suffer a decline in German support and funding. This would be due to the expected reduced influence of Germany in the world with respect to these two very critical global challenges.

In the short term, the presence of German companies in the Indonesian market is not expected to decrease. Past German politics had always encouraged more business activities in Indonesia. However, an AfD-led government might cease to encourage increased German investments in the country. This, however, in the long run, could affect German companies doing business in Indonesia, as they would be affected by any changes in standards, sustainability requirements, and market access in other EU countries that an AfD-led Germany might not be able to influence within the EU framework. In terms of Indonesian exports to Europe, the lack of support from Germany in the EU framework would increase the uncertainty of market access conditions in individual EU countries. This would negatively affect Indonesian green financing and climate projects that are promoted by Germany hitherto.

The future of Germany’s energy transition in Indonesia will likely be a stalemate for the time being. An AfD-led government would put the brake on energy transition at home and abroad, and take a highly sceptical view of foreign climate policy. This means that climate policy in Indonesia will no longer receive the amount of development funds, or indeed support of any kind, which it has hitherto received from Germany. Indonesia, highly dependent on foreign funding as it is, will have to look elsewhere for funding and for expertise. That will be a challenge, to say the least, for a country that is already struggling to live up to its climate change ambitions as it is. Its credibility as a global climate change actor will be called into question. In terms of security and strategy, Germany’s Indo-Pacific Strategy focuses on maritime security in the region, on maintaining a rules-based order and on supporting ASEAN centrality. Without Germany’s support, Indonesia will be left to its own devices to maintain its strategic neutrality in the region and to press its initiatives at sea.

To conclude, this essay provides the Indonesian government and other interested parties with a framework for coping with the Alternative for Germany (AfD) in power. For the short term, Indonesia will have to change its way of dealing with Germany in a similar way as it would change in dealing with the less coherent and less values-driven European landscape as a whole. The country’s interest would be best served by presenting itself to the world as a stable, very predictable and non-ideological global player. It will have to continue its diplomatic efforts and maintain the robust level of working-level contacts within a results-oriented framework. It will have to seek other climate change financing from multilateral development banks and from the many private sector green-tech investors around the world in order to be able to sustain its vital energy transition initiatives in the long term.

The opinions expressed in this article are the author’s own.

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